Circle CEO Attacks SEC Over Stablecoin Regulations

Circle CEO Jeremy Allaire has attacked the United States Securities and Exchange Commission (SEC) over increasing clampdown on stablecoins, stressing that it is not the duty of the SEC to regulate stablecoin as per a post. 

Circle's Jeremy Allaire says banking regulators would be better for overseeing stablecoins than the SEC https://t.co/8nibUU4taW

— Bloomberg Crypto (@crypto) February 23, 2023

Allaire argued in an exclusive interview with Bloomberg on Feb. 24 that stablecoins are exclusively meant for payment systems and should not be confused or regarded as securities. 

He further stated that SEC’s clampdown on Paxos is misplaced because it is not the appropriate agency saddled with the responsibility to regulate stablecoins.

According to Allaire:

“There is a reason why everywhere in the world, including the U.S. the government is specifically saying stablecoins are a payment system and banking regulator activity.”

Recall that Circle rejected the rumour last week that its stablecoin USDC is being investigated by the SEC sequel to the issuance of a Wells notice to Binance USD issuer, Paxos. 

Meanwhile, Circle CEO Jeremy Allaire took turns commending SEC over its proposal on crypto custody, which will make it difficult for crypto exchanges to become custodians. 

He remarked that having standard and qualified custodians that can offer appropriate control structures will not only protect investors but also prevent avoidable market turmoil. 

Circle is the issuer of the USDC stablecoin, which is the world’s second-largest stablecoin with a circulating supply of $42.2 billion. 

SEC Commissioner Suggests Way forward

Amid the lingering controversy over the regulation of stablecoin by the U.S. SEC, one of its commissioners Hester Peirce has urged the agency to refer to Congress for proper legislation before taking drastic measures. 

Getting lots of questions re stablecoins & SEC: Facts & circumstances of course, but SEC should defer to Congress, which is actively considering the issue. In the meantime, we & other regulators could hold public roundtables. Enforcement actions aren't the way to write the rules.

— Hester Peirce (@HesterPeirce) February 22, 2023

In view of the above, Jeremy Allaire supported the claim, stressing that Congress should be allowed to perform its statutory duties by enacting laws that will have a broad impact on society.

There is no mincing word that having clear regulations is a step in the right direction as it would abate undue crisis and conflictual relationships between crypto firms and regulatory institutions.